Hetmantsev’s White Business Club: A Threat to the Economy and National Security

The White Business Club, created on the initiative of Danylo Hetmantsev, chairman of the Verkhovna Rada Committee on Finance, Taxation and Customs Policy, has become embroiled in another scandal due to the fact that some members of the list have ties to the aggressor country. Despite the stated goal of supporting honest companies, critics see this as a tool to create privileges for the elite, which contradicts the principles of business equality before the law, as well as a threat to national security, UNN reports.

Sanctioned persons and ties to Russia

According to the data of the analytical platform Opendatabot, 7 997 companies were included in the “White Business Club,” which, as Hetmantsev declared, was created for honest and conscientious business and would protect entrepreneurs from excessive attention from the tax authorities. That is, the list of those selected was to include businesses that meet the standards of transparent business conduct in Ukraine, demonstrate openness, pay taxes in good faith, submit reports, and have no ties to Russia.

“However, at the time of the full-scale invasion, 24 companies from the club had Russian owners. Currently, none of these businesses officially have a Russian trace. We would like to remind you that since the beginning of the full-scale war in Ukraine, there has been a moratorium on changing registration data in companies with owners from Russia, except for a few cases clearly defined by law,” the statement said.

In particular, according to analysts, of the State Tax Service’s trusted list includes companies that are related to sanctioned persons through joint business. Thus, two companies belong to the Kozak brothers’ group, whose owners are connected to Viktor Medvedchuk’s group. The list also includes businesses that have ties to Alef Corporation, owned by the sanctioned Vadym Yermolaiev, and Burisma Group, whose owner is in the Corruption Register , etc.

According to Serhiy Dorotych, head of the #SaveFOP movement, there is nothing surprising in this situation, as Hetmantsev created the White Business Club solely to get his “people” in. He reminded that earlier Hetmantsev worked for 8 years  as an assistant to former MP Volodymyr Sivkovych, who is suspected of treason and longtime work for the Russian FSB.

“Since the formation of this White Business Club was, to put it mildly, unclear and non-transparent, it was decided in private – to include or not to include in this list. We did not hear any discussion. It is decided by some official according to their own criteria, and you and I cannot check whether these criteria are true or not, because everything is covered by commercial secrecy. They include the business they were told. Regarding Hetmantsev, we have talked many times, there is no doubt that he is a saboteur and he is building an agent network. Because this person has been changing diapers for Sivkovych for several cadences in a row,” Dorotych said in a commentary to UNN.

He explained that by creating preferences for businesses with Russian ties, the government is supporting an agent network operating inside the country, which is how saboteurs are financed.

It is worth noting that the former acting deputy head of the State Tax Service, Yevhen Sokur, who was also called Hetmantsev’s right-hand man in the tax service and was considered by the media to be a fully controlled person of the head of the Verkhovna Rada Tax Committee, was responsible for the formation of the list of elected officials. Now, by the way, after his dismissal, he has returned to work as Hetmantsev’s assistant. This may be another explanation for how companies associated with sanctioned individuals made it to the list of the elected.

According to Serhiy Dorotych, Hetmantsev’s White Business Club should be eliminated altogether as it harms the economy and the interests of the state. “It is necessary to urgently repeal (the law on the establishment of the club – ed.) before worse precedents are set,” the expert emphasized.

One third of the elected officials are dishonest

Andriy Dligach, chairman of the Board of the Coalition of Business Communities for the Modernization of Ukraine, also criticized the initiative, calling it anti-economic and anti-liberal.

“The criteria for joining the club were designed to create advantages for certain companies. At the same time, some of the companies on the list are de facto not honest – even those who work in Russia or have ties to oligarchs,” he said in a commentary to UNN.

Dligach emphasized that the club’s concept contradicts the idea of a free market. “No company should receive preferences based on non-transparent criteria. This discriminates against other companies that operate honestly in the market,” the expert said.

He added that the law creating the White Business Club had criteria that theoretically allowed international companies, as well as representatives of small and medium-sized businesses, to be included in the list of the chosen ones, but because it was created for its own, many truly virtuous companies were not included.

“From an economic point of view, the criteria are inappropriate, because, once again, these criteria make it impossible for completely honest companies to get on this list. By the way, according to our estimates, about a third of the companies included in the Club cannot be considered honest,” emphasized Dligach.

Experts interviewed by UNN emphasize that Hetmantsev’s club of the chosen creates discriminatory conditions in which most entrepreneurs will feel “black” just because they are not on this list.

Sergiy Dorotych emphasized that the creation of the White Business Club is a  dangerous precedent. He noted that the determination of who is honest and who is not should be based solely on court decisions. No official has the right to stigmatize a business without clear evidence.

“Here, only the court decides that you are a criminal, you have violated the law, you have not paid taxes. No tax officer has the right to determine that I, for example, am black and you are white. That is, until there is a court decision that has entered into force, we are all white,” Dorotych said.

The expert also emphasized that non-transparent criteria for the inclusion of companies allow “their own” to avoid inspections and gain competitive advantages, which threatens the investment climate in Ukraine.

“This undermines business confidence in the state and encourages capital outflows abroad,” Dorotych added.

Political risks

In addition to economic and national security threats, experts point to the political component of the initiative. According to Dorotych, such a structure can be used to influence the state’s economic policy by providing support to pro-Russian businesses and financing corruption schemes.

In addition, the creation of the White Business Club in Ukraine has officially become the first anti-reform in a long time. This conclusion was reached by experts of the independent analytical platform Vox Ukraine

Experts agree that the existence of the White Business Club should be terminated.

“We need to implement a real tax reform that would provide equal conditions for all market participants. The abolition of the club is the first step towards restoring business confidence in the state,” Dligach summarized.

The initiative, which was supposed to be a tool to support business, instead creates additional threats to the country’s economy and security, deepening distrust of state institutions. The abolition of the White Business Club will send a signal to Ukrainian business that the rules of the game in Ukraine must be fair and transparent.

Discrimination against businesses

Experts and the business community emphasize that Hetmantsev’s initiative to create this club of the elite is discriminatory and contradicts the Constitution of Ukraine. Anatoliy Amelin, executive director and co-founder of the Ukrainian Institute for the Future think tank , believes that this creates an opportunity to divide entrepreneurs into those who are politically unwanted and those who are acceptable to the authorities.

“This is discrimination, this is discretion and this is a violation of the Constitution. According to the Constitution, everyone is equal before the law. This law creates conditions under which someone has preferences and a model that determines whether a company should be included in the White Business Club or not – they determine their performance there is better than the market average. But this is a market, this is a free economy – someone works better, someone works worse, and the idea itself is unconstitutional,” he said.

Business ombudsman Roman Vashchuk also criticized the White Business Club. He noted, in particular, that it would create a reservation for the elite instead of leveling the playing field for all businesses.